Home Daily Commentaries NZD holds onto break above US$0.60 as attentions turn to US employment report

NZD holds onto break above US$0.60 as attentions turn to US employment report

Matt Richardson
Written by
Matt Richardson

Matt Richardson

OFXpert

Matt provides expertise in currency risk management to his clients, drawing from his 14 years of experience in foreign exchange.

| Friday 5 April, 2024

Daily Currency Update

The New Zealand dollar outperformed through trade on Thursday, buoyed by an improvement in risk sentiment and extended rally across key commodities. The kiwi was among the top performing major currencies, rallying over 0.5% and punching back above US$0.60 as investors look to test key technical levels ahead of tonight’s all important US non-farm payroll print. Having touched session highs just north of US$0.6045, the NZD tracked lower into this morning’s open and currently buys a little more than US$0.6025. While stronger against the USD, the NZD enjoyed gains against the euro and GBP but fell to a 9-month low against the AUD, slipping below AU$0.9130.

Our attentions now turn to tonight’s all important US non-farm payroll print. We expect a modest slowdown in labour market performance and an uptick in the unemployment rate, supporting an early H2 Fed rate cut. A surprise to the upside could amplify calls for the Fed to maintain a patient approach adding more near term pressure on the NZD, while a worsening in employment conditions will elevate pressure on the Fed to bring forward easier financial conditions, possibly helping the NZD consolidate a break above US$0.60.

Key Movers

The USD underperformed through trade on Thursday, steadily falling as markets position ahead of key employment data. Initial US jobless claims increased last week, marking a fresh two month high and while Easter can disrupt reporting and create seasonal anomalies, leading indicators suggest employment conditions are worsening. Job cut announcements have risen to their highest level in over a year, while the resignation rate has fallen as employees are no longer as confident of finding new work easily. US treasury yields showed little net movement while equities enjoyed strong gains with the S&P 500 up 0.7% on the day. The prospect of Fed rate cuts and looser financial conditions emboldened investors. The euro tested a break above 1.0850 before retracing gains and closing flat for the day, while the GBP slipped back below 1.2650 and the yen forced the dollar back below 151.50 and toward intraday lows at 151.18.

With Fed policy makers all singing from the same sheet our attentions turn to tonight’s all important non-farm payroll print.

Expected Ranges

  • NZD/USD: 0.5950 - 0.6080 ▲
  • NZD/EUR: 0.5500 - 0.5600 ▲
  • GBP/NZD: 2.0800 - 2.1100 ▼
  • NZD/AUD: 0.9100 - 0.9200 ▼
  • NZD/CAD: 0.8100 - 0.8200 ▲

Written by

Matt Richardson

OFXpert

As a Senior Corporate Client Manager, Matt provides expertise in currency risk management to his clients, drawing from his 14 years of experience in foreign exchange. Matt has clients who he has been working with for over a decade, a testament to his knowledge and dedication in the field. Matt is also a regular contributor on Ausbiz, offering clear and precise updates on currency market trends, showcasing his ability to interpret complex financial data into actionable insights.